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Holiday advice - Prague / Austria / Switzerland...?

Hi all,
My boyfriend and I have got most of August off work for a 'big' holiday that we've yet to sort out...originally we wanted to do a back-packing trip somewhere exciting and far-flung, but from our investigations so far it's looking like we've left it too late. So, we're now thinking of back-packing around Europe - possibly starting in Prague, going to Vienna, the Tirol and into the Swiss Alps. (Apologies if my geography is still dodgy even with a map!) We'd like to do some light hiking, see some amazing scenery, breathe some fresh mountain air, possibly relax by a lake and see a couple of cities too. So we were thinking of flying into Prague and out of Zurich. Despite having guidebooks, we're being totally indecisive, partly because I'm a bit scared that it will still end up being pretty expensive in some of these places, even if we camp / hostel it. (A true money-saver, it's always hard to part with the hard-earned stuff!) We're unsure about whether to get inter-rail tickets too and as we're both 30 I don't think we'd be able to get any discounted ones. We've got a budget of about £700 each for everything.
If anyone could give us some advice on where to go and help us from being so totally pants at organising and booking something we would be eternally grateful! We'd be departing from London.
Thanks in advance,
Sarah :confused:

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